Tokenless biometric electronic check transactions

ABSTRACT

A tokenless authorization of an electronic check between a payor and a payee using an electronic identicator and at least one payor bid biometric sample is described. The method comprises a payor registration step, wherein the payor registers with an electronic third party identicator at least one registration biometric sample, and at least one payor checking account data. An electronic financial transaction is formed between the payor and the payee, comprising at least one payor bid biometric sample, wherein the bid biometric sample is obtained from the payor&#39;s person, in a transaction formation step. Preferably in one transmission step the payor bid biometric sample is electronically forwarded to the electronic identicator. A comparator engine or the identification module of the electronic identicator compares the bid biometric sample with at least one registered biometric sample for producing either a successful or failed identification of the payor. Once the electronic identicator successfully identifies the payor, the payor&#39;s previously registered checking account data is retrieved, and a biometric-based authorization of an electronic check is authorized without the payor presenting any personalized man-made tokens such as paper checks or magnetic swipe cards.

RELATED APPLICATION DATA

This application is a continuation of U.S. application Ser. No.09/239,595, filed on Jan. 29, 1999, now U.S. Pat. No. 6,230,148, toissue May 8, 2001, which is a continuation of U.S. application Ser. No.08/705,399, filed on Aug. 29, 1996, now U.S. Pat. No. 5,870,723, whichis a continuation-in-part of U.S. application Ser. No. 08/442,895 filedon May 17, 1995, now U.S. Pat. No. 5,613,012 which is acontinuation-in-part of U.S. application Ser. No. 08/345,523, filed onNov. 28, 1994, now U.S. Pat. No. 5,615,277.

FIELD OF THE INVENTION

This invention relates to the field of tokenless biometric financialtransactions. Specifically, this invention is directed towards a systemand method of using biometrics for processing electronic check financialtransactions without requiring the payor to directly use or possess anyman-made personalized tokens or paper checks. For any transactiondesignated to be processed as an electronic check, this inventionprovides a payor, whether an individual or a business, with the abilityto pay for goods and services either at the retail point of sale or overthe internet using only a biometric sample.

BACKGROUND OF THE INVENTION

Traditionally, a person must directly possess a man-made personalizedtoken whenever attempting authorization for an electronic financialtransaction. Tokens such as magnetic ink encoded paper checks, smartcards, magnetic swipe cards, identification cards or even a personalcomputer programmed with resident user-specific account data, are“personalized” because they are each programmed or encoded with datathat is unique and personalized to the authorized user. For examples: ata retail point of sale, the user directly possesses and physicallypresents personalized checks or cards encoded with his unique accountdata to the merchant; or, over the internet, the user directly possessesand electronically presents his personal computer's resident user-uniqueaccount data to the remote merchant. By contrast, as the disclosedinvention is completely tokenless, it does not require the user todirectly possess, carry or remember any personalized token that can belost, stolen or damaged.

Of all such personalized man-made tokens, magnetic ink encoded paperchecks have long been used as the token of choice in financialtransactions. Currently, around 65 billion paper checks are writtenannually in the United States. These paper checks are time-consuming towrite, costly for both consumers and businesses to handle and process,and prone to fraud. It is currently estimated that these inefficienciesannually cost consumers and businesses over $10 billion in fraud lossesand over $40 billion in processing time and personnel resource costs.For example, paper checks are particularly vulnerable to fraud. Becausethey do not require the use of a personal identification number (“PIN”),a lost or forged paper check can easily be turned into cash by a fraudperpetrator. Counterfeit checks can readily be created by acquiring anaccountholder's valid account number and bank routing code, thenencoding those numbers as printed magnetic numerical characters on ablank check template. Valid paper checks that are stolen can beselectively moistened with solvents to retain authorized signatures anderase designated financial amounts in order to over-write them with ahigher denomination value. These resultant fraudulent checks can then bepresented to payees or businesses, with the transaction being charged tothe rightful checking account. Check fraud may also be committed byauthorized checkholders themselves, whereby they use a check of theirown to make purchases, and subsequently claim the check had been lost orstolen, and used without their knowledge.

Of all payment modes, checks take the longest amount of time tocomplete, authenticate and process. They require additional time toprocess for deposit, and cost more money for banks to clear and settle.At the retail point of sale, submission of paper checks is oftenaccompanied by a secondary token used for identification, such as aplastic driver's license card, requiring more time and cost. All ofthese charges are paid by merchants or businesses, and are ultimatelyborne by the consumer.

Both at a retail site and over the internet, paper checks are presentedfor real-time remote access to financial accounts via magnetic inkcharacter readers, with magnetic stripe or bar code readers sometimesbeing used to also automatically read identification cards like adriver's license. In some instances on the Internet, the user's personalchecking account data is stored resident within the user's personalcomputer. In this manner, a PC is the personalized man-made memory tokenthat the user is required directly possessed each time he seeks toauthorize an electronic check via the Internet.

Therefore, whether buying services or products, a consumer or a businessmust rely on the money transfer to be enabled by the consumer directlyusing personalized man-made memory tokens. The sole functions of suchtokens are to attempt to identify both the user and the financialaccount being accessed to pay for the transaction. However, these tokenscan be easily exchanged, either knowingly or unknowingly, between users,thereby de-coupling them from the original intended user. Because theseencoded paper checks, identification cards or personal computers storingresident user data are ubiquitous in today's consumer and businesstransactions as verification of the submitter's check writing authority,and the attendant inconveniences and security vulnerabilities of suchtokens are widespread.

Various token-based biometric technologies have been suggested in theprior art, using smart cards, magnetic swipe cards, or paper checks inconjunction with fingerprints, hand prints, voice prints, retinalimages, facial scans or handwriting samples. However, because thebiometrics are generally either: a) stored in electronic andreproducible form on the token itself, whereby a significant risk offraud still exists because the comparison and verification process isnot isolated from the hardware and software directly used by the payorattempting access, or; b) used in tandem with the user directly usingmagnetic swipe cards, paper checks or a PC with the user's financialdata stored resident therein. Examples of this approach to systemsecurity are described in U.S. Pat. No. 4,821,118 to Lafreniere; U.S.Pat. No. 4,993,068 to Piosenka et al.; U.S. Pat. No. 4,995,086 to Lilleyet al.; U.S. Pat. No. 5,054,089 to Uchida et al.; U.S. Pat. No.5,095,194 to Barbanell; U.S. Pat. No. 5,109,427 to Yang; U.S. Pat. No.5,109,428 to Igaki et al.; U.S. Pat. No. 5,144,680 to Kobayashi et al.;U.S. Pat. No. 5,146,102 to Higuchi et al.; U.S. Pat. No. 5,180,901 toHiramatsu; U.S. Pat. No. 5,210,588 to Lee; U.S. Pat. No. 5,210,797 toUsui et al.; U.S. Pat. No. 5,222,152 to Fishbine et al.; U.S. Pat. No.5,230,025 to Fishbine et al.; U.S. Pat. No. 5,241,606 to Horie; U.S.Pat. No. 5,265,162 to Bush et al.; U.S. Pat. No. 5,321,242 to Heath,Jr.; U.S. Pat. No. 5,325,442 to Knapp; U.S. Pat. No. 5,351,303 toWillmore; U.S. Pat. No. 5,832,464 to Houvener et al, all of which areincorporated herein by reference.

Uniformly, the above patents disclose financial systems that require theuser's presentation of personalized tokens to authorize eachtransaction, thereby teaching away from tokenless biometric financialtransactions. To date, the consumer financial transaction industry hashad a simple equation to balance: in order to reduce fraud, the cost andcomplexity of the personalized token directly possessed by the user mustincrease.

As a result, there is a need for a new electronic financial transactionssystem that is highly fraud-resistant, practical, convenient for theconsumer, and yet cost-effective to deploy. More specifically, there isa need for an electronic check financial transaction system that reliessolely on a payor's biometric for transaction authorization, and doesnot require the payor to directly possess any personalized man-madememory tokens such as smart cards, magnetic swipe cards, encoded paperchecks or personal computers for identification.

Lastly, such a system must be affordable and flexible enough to beoperatively compatible with existing networks having a variety ofelectronic transaction devices and system configurations.

Accordingly, it is the objective of the present invention to provide anew system and method of tokenless biometric financial transactions forelectronic checks.

As such, it is an objective of the invention to provide an electroniccheck financial transaction system and method that eliminates the needfor a payor to directly possess any personalized man-made token which isencoded or programmed with data personal to or customized for a singleauthorized user. Further, it is an objective of the invention to providean electronic financial transaction system that is capable of verifyinga user's identity based on one or more unique characteristics physicallypersonal to the user, as opposed to verifying mere possession ofpersonalized objectives and information.

Another objective of the invention is to provide an electronic financialtransaction system that is practical, convenient, and easy to use, wherepayors no longer need to remember personal identification numbers toaccess their financial accounts.

Another objective of the invention is to provide increased security in avery cost-effective manner, by completely eliminating the need for thepayor to directly use ever more complicated and expensive personalizedtokens.

Another objective of the invention is to provide an electronic financialtransaction system that is highly resistant to fraudulent accessattempts by unauthorized users.

Another objective of the invention is to authenticate the system to thepayor once the electronic financial transaction is complete, so thepayor can detect any attempt by criminals to steal their authenticationinformation.

Another objective of the invention is that the payee be identified by anelectronic third party identicator, wherein the payee's identificationis verified. Optionally, therefore, the payee would register with theelectronic third party identicator payee identification data, whichoptionally comprises, a payee hardware ID code, a payee phone number, apayee email address, a payee digital certificate code, a payee financialaccount number, a payee biometric, or a payee biometric and PINcombination.

Still, another objective of the invention is to be added in a simple andcost-effective manner to existing terminals currently installed atpoints of sale and used over the Internet around the world.

Yet another objective of the invention is to be efficiently andeffectively operative with existing financial transactions systems andprotocols, specifically as these systems and protocols pertain toprocessing of electronic checks.

SUMMARY OF THE INVENTION

The invention satisfies these needs by providing a method and device fortokenless authorization of an electronic check between a payor and apayee using an electronic identicator and at least one payor bidbiometric sample. The method comprises a payor registration step,wherein the payor registers with an electronic identicator at least oneregistration biometric sample, and at least one payor checking account.An electronic financial transaction is formed between the payor and thepayee, comprising at least one payor bid biometric sample, wherein thebid biometric sample is obtained from the payor's person, in atransaction formation step. Preferably in one transmission step thepayor bid biometric sample is electronically forwarded to the electronicidenticator. A comparator engine or the identification module of theidenticator compares the bid biometric sample with at least oneregistered biometric sample for producing either a successful or failedidentification of the payor. Once the identicator successfullyidentifies the payor, the payor's previously registered checking accountdata is retrieved, and a biometric-based authorization of an electroniccheck is issued without the payor presenting any personalized man-madetokens such as paper checks or magnetic swipe cards to transfer fundsfrom the payor's checking account to a payee financial account.

The transaction formation step may optionally include a transactionamount in the electronic financial transaction.

The method may also optionally include a step in which the payor'spreviously registered checking account data is electronically displayedto the payor, or electronically forwarded to a financial transactionprocessor.

The payor registration step may optionally further comprise registeringa payor personal identification number with the electronic identicator.

The authorization system alternatively further comprises a payorresource determination step, wherein it is determined if the payor'sfinancial account has sufficient resources to be debited for thetransaction amount.

Optionally, in a payor account selection step, after the payor has beensuccessfully identified in the payor identification step, the tokenlessauthorization system presents at least one financial account which wasregistered by the payor with the tokenless authorization system forselection of one of the checking accounts by the payor for debiting. Ina transaction payment step, the transaction amount is debited from apayor's financial account. Preferably, at the same time, the transactionamount is credited to the payee's financial account.

The present invention as described satisfies these objectives in anumber of ways. First, it is extremely easy and efficient for people touse because it eliminates the need to directly possess and safeguard anypersonalized tokens in order to access their authorized electronicfinancial accounts. Anyone who has lost a checkbook or had theirpersonal computer damaged or stolen, knows well the keen anxiety causedby such tokens. This invention direct addresses these concerns. Thepayor is now uniquely empowered, to conveniently conduct personal and/orprofessional electronic transactions at any time without dependence uponany tokens that may be stolen, lost or damaged.

The invention is clearly advantageous from a convenience standpoint topayees and financial institutions by making electronic check purchasesand other financial transactions less cumbersome and more spontaneous.The paperwork of financial transactions is significantly reduced ascompared to standard paper or electronic check transactions wherein thecopies of the check must often be retained by the payee, financialinstitutions and the payor. Further, because the method and system ofthis invention is designed to provide a person with simultaneous directaccess to all of his financial accounts, the need for transactionsinvolving paper checks, paper money, credit drafts and the like will begreatly reduced, thereby reducing the cost of equipment and staffrequired to collect, account, and process such transactions.

Further, the substantial manufacturing and distributing costs of issuingand reissuing all personalized tokens such as paper checks, magneticswipe cards, and smart cards, thereby providing further economic savingsto issuing banks, businesses, and ultimately to consumers. Even thetraditional requirement for internet electronic transactions of thepayor needing to directly possess and use the ultimate personalizedtoken, a personal computer with resident payor identification data, willbe eliminated.

Moreover, the invention is markedly advantageous and superior toexisting systems in being highly fraud resistant by determining identityand transaction authorization solely from an analysis of a user's uniquebiometric characteristics.

These and other advantages of the invention will become more fullyapparent when the following detailed description of the invention isread in conjunction with the accompanying drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 shows the preferred embodiment of a Party Identification Device(PIA) with a biometric sensor and key pad.

FIG. 2 shows the connection between the PIAs to a local router and anetwork operations center.

FIG. 3 shows an embodiment where the PIAs are connected to the DPC usinga cellular digital packet data.

FIG. 4 is a preferred embodiment of the Data Processing Center (DPC)showing the connections between its components.

FIG. 5 shows a method by which the transaction processor determines aBiometric-PIN from the Biometric-PIN Identification subsystem isresponsible for a given subdivision of the biometric database.

FIG. 6 shows the overall preferred flow chart where a biometric sampleand PIN are used by the tokenless system to authorize an ACHtransaction.

FIG. 7 is a diagram of the shows the overall preferred embodiment of thetokenless system to authorize an ACH transaction.

DETAILED DESCRIPTION

The invention provides a cardless biometric method for authorizingelectronic financial transactions using electronic checks either at theretail point of sale or over the Internet. It is the essence of thisinvention that the payor not be required to directly use any man-madepersonalized token in order to effect the transaction. A computer systemis used to accomplish these goals.

The tokenless authorization system or the third party identicatorcomprises the following components:

Party Identification Apparatus (PIA)

Communication lines

Data Processing Center (DPC)

These components together allow a payor to originate an electronic checkwithout requiring the payor to carry driver's licenses, credit cards,check guarantee cards, or other forms of identity as well as the actualpaper check itself.

Throughout this specification the terms electronic identicator and thirdparty identicator are used interchangeably; it is understood that theelectronic identicator may be owned and/or operated by the payee, thepayor, or by a third party, without loss of generality.

Party Identification Apparatus (PIA)

The PIA is a device that gathers identity information for use inauthorizing electronic checking transactions. Each PIA conducts one ormore of the following operations:

gather biometric input from a payor or payee

gather a PIN code or password from a payor or payee

secure communication between PIA and DPC using encryption

secure storage of secret encryption keys

store and retrieve a unique payee PIA hardware identification code

secure enclosure & components from unauthorized tampering

display information, allow parties to approve or cancel a financialtransaction

scan a MICR check

store, verify, and retrieve a payee digital identification code

allow parties to select among choices of payor checking and payeefinancial accounts

A preferred embodiment containing these components is shown in FIG. 1.

Biometric input is gathered using a biometric sensor 2 located withinthe PIA 1. Biometric sensor 2 is a finger image sensor, however it isunderstood that other types of biometric sensors such as iris scan andothers are also used.

For PIAs requiring a fingerprint sensor, the PIA has a biometric frauddetection unit (not shown) that will assure that any biometric inputgathered from the biometric sensor is from a real physical person,instead of a copy or replica. Preferably for the finger image sensor,this is a blood flow detector.

For systems employing a PIN, PIN input is preferably gathered using akeypad or PIN pad 6 that is also located securely inside the PIA.

Communication security is provided by encryption using unique secretkeys known only to that specific PIA and the DPC, and the DES encryptionalgorithm, preferably triple-encrypted. Triple encryption meanssuccessive encrypt/decrypt/encrypt operations using two distinct 56-bitDES keys. This provides significantly higher security than a singleencryption operation with one 56-bit DES key. Alternately, apublic/private key system may also be used to encrypt information thatpasses between PIA and DPC. Both DES and public key encryption is wellknown in the industry.

The PIA also has secure memory that can store and retrieve the uniquesecret encryption keys used to enable secure communications with theDPC. In this embodiment, this is battery backed-up RAM that is set up tobe erased whenever the tamper-detect circuitry reports that tamperinghas been detected.

To use encryption keys, a key management system must be employed toassure that both sender and receiver are using the same key. When usingDES, a preferred key management system is DUKPT, which is well known inthe industry. DUKPT is designed to provide a different DES key for eachtransaction, without leaving behind the trace of the initial secret key.The implications of this are that even successful capture and dissectionof a PIA will not reveal messages that have previously been sent, a veryimportant goal when the effective lifetime of the informationtransmitted is years. DUKPT is fully specified in ANSI X9.24. The DUKPTkey table is stored in the secure memory.

Each PIA preferably has a hardware identification code that isregistered with the DPC at the time of manufacture. This makes the PIAuniquely identifiable to the DPC in all transmissions from that device.This hardware identification code is stored in write-once memory 10.

PIA physical security is assured by standard mechanisms. Preferably,these comprise tamper-detect circuitry, an enclosure that cannot beeasily opened without visibly injuring the enclosure, erasable memoryfor critical secrets such as encryption keys, write-once memory forhardware identification, tight integration of all components, and“potting” of exposed circuitry.

Information such as the amount of a transaction, the identity of apayee, the list of checking accounts for a payor to select from, orother transaction-related information is displayed using an integratedLCD screen 14. A checking account is defined as any type of a financialaccount from which an ACH transaction can be originated, such as achecking account, a money market account with check-writing privileges,and the like. It is preferable that the LCD screen be connected securelyto the other components in the PIA to maintain security. Approval orcancellation of a electronic check transaction is done using the PIAkeypad.

The magnetic ink character reader (MICR) 20 is used to read the accountnumber that is encoded in magnetic ink on the paper check. This is usedduring initial registration to link a payor's checking account number tothe biometric identity.

Optionally, the PIA also validates public key digital certificates. Inone embodiment, public keys of a particular certifying authority areinitially stored in the PIA at the time of construction. This providesthe mechanism to verify a payee's digital certificates that are signedby the certifying authority.

The PIA also optionally displays a list of payor checking or payeefinancial accounts on the LCD screen and provides for selection ofaccounts using the keypad. Specific logos provided by each bank arepreferably displayed in place of the account number, so that the payorcan select which checking account the electronic check will come fromusing the keypad.

Although a preferred embodiment is described above, there are manydifferent variations on specific PIA implementations. Fundamentally anydevice that is secure, can identify a person or entity with a highdegree of certainty, and can connect to the DPC via some form ofcommunication line can serve as a PIA.

In some embodiments, specifically the home use and public use instances,the PIA hardware identification code is not used to identify either thepayor or the payee.

Communication Lines

Communications between the PIA and the DPC occur via many differentcommunication methods. Most depend on the particular communicationnetworks already deployed by the organization or retailer that deploysthe transaction authorization system.

In an embodiment shown in FIG. 2, the PIAs 1 are connected via ethernetto a local router 2, which is itself connected to a network operationscenter (NOC) 3 via frame relay lines. At least one DPC 4 is located atthe NOC. Messages are sent from PIA to the DPC using TCP/IP over thisnetwork.

In another embodiment shown in FIG. 3, the PIAs 1 are connected via acellular digital packet data (CDPD) modem to a CDPD provider 2, whoprovides TCP/IP connectivity from the PIA to an intranet to which atleast one DPC 3 is attached.

In yet another embodiment, a PIA is connected via the Internet, as is atleast one DPC. TCP/IP is used to transmit messages from PIA to DPC.There are many different ways to connect PIA to DPC that are wellunderstood in the art.

Data Processing Center

Data Processing Centers (DPC) serve to identify the payor and,optionally, the payee in a transaction, retrieve checking and financialaccount information for identified parties, and perform the executionthat will result in settlement of transactions and funds delivery forthe electronic check.

As seen in FIG. 4, the DPC 22 is connected to the Internet or intranet 2using a firewall machine 24 that filters out all messages that are notfrom legitimate PIA devices. Messages are then sent to a transactionprocessor (TP) 26, which is responsible for overseeing the stepsrequired to process the entire financial transaction.

In a preferred embodiment, the messages are decrypted. For this, thetransaction processor uses the decryption module (DM) 28, which utilizesthe hardware identification code of the PIA to identify the encryptioncodes that is required to decrypt the message from the PIA.

Once decrypted, the identity of both parties to the transaction isdetermined using the identification module (IM), or comparator engine30. Once identified, the TP 26 determines the financial accounts eachparty will use using the account selector (AS) 32. This requires a DPCmessage back to the originating PIA if either the payor or payee haveseveral financial accounts to choose from for completion of thefinancial transaction.

Once the financial account of each party for the transaction isselected, the financial transaction is executed using the executionmodule (EM) 34. The EM preferably first verifies that financial accountsof both parties to the transaction are valid and that the electroniccheck is likely to clear. Thereafter, EM 34, creates an electronic checkusing an ACH transaction that is eventually sent to the ACH Operator 40.Each transaction (successful or not) is logged in the logging facility(LF) 36.

Electronic checks that are returned for any reason are processed usingthe return processor (RP) 42, which re-presents returned checks whoseaccounts were temporarily short of funds, and reports to the payee asuncollectable all of the remaining returned electronic checks.

In a preferred embodiment, more than one DPC provides fault tolerancefrom either natural or man-made disasters. In this embodiment, each DPCuses backup power generators, redundant hardware, mirrored databases,and other standard fault tolerant equipment known in the industry.

Decryption Module (DM)

In a preferred embodiment, all messages the DPC receives, with theexception of those not constructed by a PIA, contain a PIA hardwareidentification code, a sequence number, and a Message AuthenticationCode (MAC). (Message authentication codes, also known as cryptographicchecksums, well known in the transaction industry, are used to assurethat any changes to the content of the message will be detectable by theentity receiving the transmission.). The DM validates the message's MACand then checks the sequence number for that particular PIA. If the DMdetermines that both the MAC and the sequence number are valid, the DMuses the unique secret key for that particular PIA to decrypt themessage. For the decryption to function properly, the DM must contain acopy of each PIA's DUKPT key table.

If the decryption operation fails, or if the MAC check fails, themessage is considered an invalid message. The TP logs a warning to theLF, terminates processing for the message, and returns an error messageto the originating PIA.

Each message TP 26 receives preferably contains a response key stored inthe encrypted section of the message. Before the TP replies to a messagethat includes a response key, it instructs the DM to encrypt theresponse message with that response key. The DM also generates a MAC forthe response and appends it to the message.

Preferably, error messages are not encrypted although the DM doesinclude a MAC for message authentication. Such messages never includeconfidential information. However, most response messages include astatus or response code that can indicate whether the request succeededor not. For example, when the EM declines a transaction for financialreasons, it does not return an error message, it returns a normaltransaction response message with a response code set to “failed”.

Identification Module (IM)

Party identification occurs in different ways, depending on theidentification information that is provided by the PIA. Theidentification module has subsystems for each type of information thatis provided, and each subsystem is highly optimized to provide rapididentification as outlined below.

In one embodiment, the ID module detects payors or, optionally, payeesthat re-register with the system by conducting a re-registration check.Given a particular registration biometric sample submitted by a personattempting to register with the system, the ID module determines if thatperson has ever been registered previously by comparing the registrationbiometric sample with other biometric samples previously registered. Ifa match occurs, the registration is rejected.

In a preferred embodiment, identification module 30 comprises subsystemsthat can identify parties from the following information:

biometric data and PIN

biometric data alone

digital identification (digital certificates)

PIA hardware identification code

Biometric-PIN Identification Subsystem (BPID)

In a preferred embodiment, the BPID subsystem comprises at least twoBPID processors, each of which is capable of identifying parties fromtheir biometric and PIN codes.

Preferably, the database of parties identifiable from biometric-PINcombinations are distributed equally across all BPID processors. Eachprocessor is then responsible for a subset of identifications.

In FIG. 5, TP 26 determines which Biometric-PIN from the BPID subsystem44 is responsible for a given subdivision of the biometric database. Inone embodiment, one BPID 46 is responsible for identifying people withPINs 1-10, another BPID 48 is responsible for identifying PINs 11-20,and a third BPID 50 is responsible for identifying PINs 21-30. Forexample, all messages from the PIA containing a PIN that equals thenumber 30 would be routed to BPID 50 for identification of the payor.

Once a BPID processor receives a bid biometric sample and PIN foridentification, the processor searches through its database, retrievingall registered biometric samples that match or correspond to thatparticular bid PIN. Once all corresponding registered biometric samplesare retrieved, the processor compares the bid biometric from the messageto all retrieved registered biometric samples. If a match is found, theprocessor transmits the identity of the party back to TP 26. If no matchis found, the processor transmits a “party not identified” message backto TP 26.

Biometric Identification Subsystem (BID)

In another embodiment, the BID subsystem comprises at least two BIDprocessors, each of which is capable of identifying parties only fromtheir biometric sample.

In one embodiment, each BID processor contains the entire database ofbiometrics. To distribute the transactions evenly across processorswithout undue effort, the TP determines randomly which BID processorwill be used for a given financial transaction, and delegates theidentification request to that BID processor. That BID processor thenperforms a search of its biometric sample database in order to find amatching registered biometric sample.

In one embodiment, other information is present that assists the BIDprocessor in searching the database. For finger images, this includesinformation such as the classification of the image (whirl, arch, etc.),and other information about the finger ridge structure that is usefulfor selecting out biometrics that are not likely to match (orinformation on biometrics that are likely to match). Various methods ofclassification for rapid search of particular biometric databases areknown in the art for example with regard to facial imaging and irisrecognition.

Biometric comparisons are often more accurate if multiple biometrics areused. In some embodiments, multiple biometrics are used to more rapidlyand more accurately identify individuals.

Digital Identification Subsystem

In a preferred embodiment, the digital identification subsystemcomprises multiple processors, each of which is capable of identifying apayee from their digital certificates. In this embodiment, digitalcertificates are used to perform digital identification of the payee.Preferably this includes corporate web site addresses and certifyingauthorities only. Where possible, people provide biometrics as a meansof identification, while computers provide digital certificates.

A digital certificate uniquely identifies a party. The major difficultyis verifying that a particular digital certificate is valid. Thisrequires a public key from the certifying authority that issued thatparticular digital certificate. This requires that the digitalidentification subsystem have a list of certifying authorities and thepublic keys used to validate the digital certificates they issue. Thistable must be secure, and the keys stored therein must be kept up todate. These processes and others relating to the actual process forvalidating digital certificates are well understood in the industry.

PIA Hardware Identification Subsystem (PHI)

In a preferred embodiment, PIA hardware identification codes aretranslated into payee identification by the PHI subsystem. Thissubsystem maintains a list of all PIAs ever manufactured. Preferably,when a particular payee purchases a PIA, that payee's identity is linkedto that PIA. Any transactions that originate from that PIA is assumed tobe destined for the party that purchased the PIA.

In one embodiment, there are many financial accounts linked to aparticular payee, while there is only one financial account linked totransactions issuing from a particular PIA. In another embodiment, thePIA hardware identification code does not serve to identify either thepayee or the payor. This is the case in PIAs purchased for publicterminals, Automated Teller Machines, or for home use.

Account Selector Subsystem (AS)

The AS process varies depending on the party being identified. Where thepayor has registered only one checking account number, that accountnumber is automatically selected by the AS for debiting of funds.

In the cases where a payor has registered several checking accounts, theAS processor retrieves a list of all designated checking accounts, andtransmits them back to the PIA for selection by the payor.

Some corporate entities will have several accounts attached to theiridentity; one account per point of sale location, one account perregion, etc. For these cases, the AS processor invokes a specificselection rule for that particular entity, based on information in anelectronic financial transaction message.

In one embodiment, particular PIAs have account selection informationassociated with them. PIAs assigned to one particular store designateone financial account for deposit of funds, while PIAs assigned toanother store designate another financial account for deposit of funds.However, both transactions are associated with the same payee.

In another embodiment, a payor or payee identifying themselves throughbiometrics has the option to pre-select the account from which thefinancial transaction will take place, using an account index code. Theaccount index code is optionally an alphanumeric, or a series of numbersand codes that act as an easy-to-remember short-hand for the accountnumber itself. These account index codes are correlated to particularchecking accounts during registration.

Execution Module (EM)

In a preferred embodiment, the execution module 34 generates an ACHtransaction for each electronic check transaction. Given a transactionamount, the identity of both parties, and a financial account numberobtained from the AS for the payee and a checking account number for thepayor, an ACH transaction is created and temporarily stored by the EM34. Preferably, multiple times per day, the EM forwards the collectionof stored electronic financial transactions to an ACH Operator (such asthe Federal Reserve Bank). The ACH Operator eventually settles thetransaction by electronically contacting the respective banks identifiedby the checking and financial account numbers in the electronicfinancial transaction, and electronically causing the transfer of fundsto occur.

In some instances, there are insufficient funds in an originatingchecking account to pay for the transaction. In other cases, thechecking account has been closed. If the transaction does not settle forthese reasons or others, the transaction is “returned”, however thereturn does not necessarily occur immediately. When an ACH transactionis returned for insufficient funds, the ACH transaction is automaticallyre-presented to the payor's bank. This frees the payees from having tomanually process None Sufficient Funds returned check transactions, asis customary with paper checks today.

In one embodiment, the EM reduces fraud by declining to accept anelectronic check based upon pre-designated criteria, prior to forwardingthe financial authorization to the ACH Operator. The EM does this byexamining the payee's checking account history. It optionally considersthe amount of the check being written, the recent check-writing patternand frequency of the originating party, and also any currentlyoutstanding returned checks. Any declines are transmitted back to theoriginating PIA.

In another embodiment, an assessment is made by a third party “checkverification” system, which determines if a given electronic check islikely to be returned as outlined above, and if so, a message is sentfrom the EM back to the PIA declining the financial transaction.

In yet another embodiment, the payee has the ability to override adecline, and accept the electronic check, absorbing the financial risk.

Logging Facility

In a preferred embodiment, the logging facility (LF) 36 logs allfinancial transaction attempts to write-once media, so that a record iskept of each transaction and each error that has occurred during theoperation of the tokenless authorization system.

Use-Sensitive DPC Configuration

While each DPC has some or all of the above features, in someembodiments the system has use-sensitive data processing capabilities,wherein multiple DPCs exist, some of which store a subset of the totalnumber of registered parties.

This system comprises at least one master DPC, which contains a largesubset of all parties registered with the system. The system furthercomprises at least two local DPCs that are physically apart from eachother. Each local DPC contains a subset of the parties contained withinthe master DPC. Data communications lines allow messages to flow betweeneach local DPC and the master DPC.

In this embodiment, identification request messages are first sent tothe local DPC for processing. If a party cannot be identified by thelocal DPC, the message is forwarded to the master DPC. If the partiesare identified properly by the master DPC, the message is processedappropriately. In addition, one or both party's identity information istransmitted from the master DPC to the local DPC, so that the next timeparties will be successfully identified by the local DPC.

In another embodiment of a use-sensitive DPC system, the system furthercomprises a purge engine for deleting a party's identificationinformation from the local DPC databases. In order to store only recordsfor those parties who use the system more than a prescribed frequencyand prevent the overload of databases with records from parties who usethe system only occasionally, the record of a party is deleted from thelocal DPC databases if there has been no attempt to identify the partyupon expiration of a predetermined time limit.

In order to make communications between the master DPC and the localDPCs secure, the system further comprises encryption and decryptionmeans, wherein communications between the master DPC and local DPC areencrypted.

Registration

Parties that wish to either originate or receive electronic checks mustfirst register with the tokenless authorization system. Theidentification and financial information registered with the system fora given party depends on the mode used to originate or receive payment.A payor must register at least one biometric or a biometric-PIN.Preferably, corporate entities must register at least one digitalcertificate, or must register their PIA hardware identification codes.All parties must also register the appropriate financial accountinformation for crediting and debiting by the ACH.

To register, a payor submits a registration biometric sample obtainedfrom their physical person by the PIA's biometric sensor. The PIAdetermines that the biometric scan is non-fraudulent, and thentranslates and compresses that biometric scan into a format suitable forrapid transmission to the DPC. The payor then optionally enters a PINcode into the PIA keypad.

Next, the person associates at least one checking account number withthe registration biometric sample in the system. Preferably, this isaccomplished by scanning a blank check provided by the person throughthe MICR reader attached to the PIA.

Preferably, an attendant verifies that the person actually owns thechecking account by comparing personal photo id (a driver's license,passport, id card, etc) to the name written on the check. Note that thisverification only need happen once, instead of on a per-transactionbasis as is common today.

Once the registration data and payor's identity is verified by theattendant, the PIA transmits the registration data to the DPC. The DPCthen inserts the biometric (or biometric-PIN) into the appropriateidentification database, updates the account selector, and enables theperson to originate electronic checks.

In one embodiment, the DPC validates the checking account data submittedduring registration. This involves making certain that the checkingaccount being registered is a valid account, and that there arecurrently no outstanding returned checks listed with that accountnumber. Preferably, an entity may either register at least one digitalcertificate, or use at least one PIA hardware identification code toidentify itself to the DPC. Digital certificates are available fromcertifying authorities, and they provide the assurance that the entitywith the certificate is the authentic owner of that identity. Thesecertificates contain readable text and other information that describesthe entity. This can include a corporate logo, the address, as well asthe company name.

This digital certificate is then linked to at least one financialaccount. This financial account is used to deposit all electronic checkswritten by the payor to the payee when the digital certificate is usedto identify the receiving party.

In an embodiment, the financial account of the entity is included in thedigital certificate. This is not a preferred embodiment, as thedisclosure of the financial account is potentially injurious to theentity.

PIA hardware identification codes are unique numbers assigned to PIAdevices at the time of manufacture. If a company wishes all transactionsissuing from a given PIA to flow to a particular corporate account, thecompany registers any such PIAs with the DPC, which updates the PIAdevice records to reflect the ownership of the PIAs.

Preferably, the security surrounding the registration of entity digitalcertificates or PIA hardware identification codes to financial accountnumbers is extremely strong, as this is a potential source for largelosses over a short period of time.

Transactions

Transactions optionally occur at a retail point of sale, across thenetwork from a well-known network merchant, or at home or publicterminal from one person to another.

Retail Point of Sale Transactions

Retail point of sale transactions as shown in FIGS. 6 and 7 arecharacterized by identifying the payor using their biometric sample orbiometric sample-PIN on a PIA controlled by payee. The payor is thusidentified through biometrics, while the payee is optionally identifiedthrough the PIA's hardware identification code.

In a preferred embodiment, a party at the point of sale originates anelectronic check in the following manner. First, the payor submits a bidbiometric sample obtained from their physical person by the PIA'sbiometric sensor. The PIA determines that the biometric sample isnon-fraudulent, and then translates and compresses that biometric sampleinto a format suitable for rapid transmission to the DPC.

Next, the payor optionally enters a PIN code into the PIA keypad. Atthis point, the PIA transmits the biometric-PIN to the DPC foridentification, optionally along with the PIA hardware identificationcode. The DPC identifies the payor using the biometric sample, andretrieves the list of checking accounts that the payor has previouslyregistered with the system, and transmits this list back to the PIA. TheDPC optionally identifies the payee's financial account using the PIAhardware identification code that was previously registered by thepayee.

The PIA displays the list of checking accounts to the payor, who thenselects one of the checking accounts from which the funds will be drawn.In the event that only one checking account was registered, that accountwill be automatically selected by the tokenless authorization system.

The transaction amount is then entered into the PIA, either using anelectronic cash register or manually, by the payee. The payor theneither approves or cancels the transaction using the PIA's OK and CANCELbuttons. Once the financial transaction is approved, the PIA preferablytransmits the financial transaction to the DPC, where the DPC authorizesthe transaction and transmits a new ACH transaction to the ACH Operatorfor the transaction amount.

Execution by the DPC may result in a declined transaction due to lack offunds or other problem condition. If the transaction is declined, theDPC transmits the decline notification back to the PIA, and the payormay either cancel the transaction, or provide another account from whichto originate payment.

In another embodiment, instead of the DPC transmitting the list ofpossible checking accounts back to the PIA for payor selection, thepayor instead indicates which account to select by entering an accountindex code or letter. This code is selected by the payor during accountregistration and linked to a particular checking account of the payor.

Network Point of Sale Transactions

Network point of sale transactions are characterized by identifying thepayor t using the payor's bid biometric sample submitted through thepayor's personal PIA, or through a public PIA attached to an ATM orother public terminal. The payee is preferably a registered networkmerchant, and is identified through a digital certificate. Thus thepayor is identified through biometrics, while the payee is optionallyidentified through the verification of a digital certificate issued byan authorized certifying authority.

In a preferred embodiment, the payor first locates the payee by locatingthe seller's place of business on the network: the web site, using thenetwork address of the payee. The payor downloads the payee's digitalcertificate to the PIA that the payor is using. The PIA verifies thatthe digital certificate provided by the payee is a valid certificate.

The payor then submits a bid biometric sample obtained from theirphysical person using the PIA's biometric sensor. The PIA determinesthat the biometric scan is non-fraudulent, and then translates andcompresses that biometric scan into a format suitable for rapidtransmission to the DPC. The payor then optionally enters a PIN codeinto the PIA keypad.

The PIA transmits the biometric or biometric-PIN to the DPC foridentification, along with the payee's digital certificate. The DPCidentifies the payor, and retrieves the list of checking accounts thatthe payor has previously registered with the system, and transmits thislist back to the PIA.

Both parties identify the financial accounts to be involved in thetransaction. The payee must do this in an automated manner. In apreferred embodiment, this occurs at the DPC using account selectioninformation included in the transaction by the payee. The payoroptionally chooses from among a list of checking accounts, or the payormay have only one account from which payment may be made, in which casethe payor's account is selected automatically.

The amount of the transaction is also transmitted to the PIA by thepayee. The payor then either approves or cancels the transaction usingthe PIA's keypad. Once the transaction is approved, the PIA transmitsthe financial transaction to the DPC, where the DPC authorizes thetransaction and transmits a new ACH transaction to the ACH Operator forthe transaction amount.

Execution by the DPC may result in a declined transaction due to lack offunds in the account, a closed account, or some other immediatelydetectable problem condition. If the transaction is declined, the DPCtransmits the decline notification back to the PIA, and the payor mayeither cancel the transaction, or select another account from which tooriginate payment if another account exists.

In one embodiment, a private code, which is distinct from a personalidentification number (PIN) and not used in a payor identification step,and is preferably chosen by the user, is transmitted to the PIA from theDPC, and presented to either the payor or payee subsequent to asuccessful identification using biometrics. This private code identifiesthe authorization system to the payor or payee users. The private codeis selected by the payor or payee during registration with the thirdparty identicator, and is never entered into the PIA during atransaction authorization. Additionally, the PIA and DPC always transmitthe private code in an encrypted form. As a result, only the authenticDPC and PIA can provide a person's private code after a successfulidentification. The private code is displayed to the payor to validatethat the authentic electronic third party identicator has processes thetransaction.

Also in a preferred embodiment, in a re-presentation step, upon returnof the electronic check, the electronic check is automaticallyre-presented for debiting the checking account of the payor.

The authorization system alternatively further comprises a tokenlessauthorization system that communicates with one or more externalcomputers during the payor resource determination step and thetransaction payment step.

The transaction amount includes data that is necessary for conducting atransaction such as price information, a list of goods and services, apayee name, a date or time, a location, or an invoice number.

The transaction acceptance step optionally further comprises the payorentering a new transaction amount, which is the sum of a cash backamount and the transaction amount, for the financial transaction.

The payor alternatively designates a future date on which thetransaction amount is to be deducted from the payor's checking accountand credited to the payee's financial account.

Preferably, in a payor re-registration step, the user's registrationbiometric samples are compared against previously designated biometricsamples wherein if a match occurs, the computer system is alerted to thefact that the payor has re-registered with the tokenless authorizationsystem.

Also preferably, in a biometric theft resolution step, where the payoruses a Biometric-PIN identification subsystem, the payor's personalidentification number is changed whenever the payor's biometric sampleis determined to have been fraudulently duplicated.

Optionally, during the payor registration step, the payor registers atleast one payor checking account and assigns an account index code toeach payor checking account, and during the acceptance step the useradds the account index code to the financial transaction, wherein theaccount index code further comprises one or more alphanumericcharacters.

In one embodiment, the PIA is actually built-in and/or integrated with apersonal computer. These personal computer PIA hardware identificationcodes are not used to identify either party in a transaction. In anotherembodiment, the payor can be a representative of a business entity thathas permission to access the business entity's accounts to purchaseitems on the network.

In yet another embodiment, settlement of payment is delayed for anagreed-upon time period, to enable implementation of net-30 paymentterms and the like. In one embodiment, a network transaction isdeposited into an escrow account at an Internet merchant, instead ofinto the merchant's actual account as a direct payment for goodsreceived.

From the foregoing, it will be appreciated how the objectives andfeatures of the invention are met. First, the invention provides afinancial transaction computer system that eliminates the need for apayor to possess and present any personalized man-made tokens, in orderto authorize a transaction.

Second, the invention provides a financial transaction computer systemthat is capable of verifying a payor's unique personal identity, asopposed to verifying possession of personalized objects and information.

Third, the invention verifies the payor's identity based upon one ormore unique characteristics physically personal to the user.

Fourth, the invention provides a cost-effective financial transactionsystem that is practical, convenient, and easy use.

Fifth, the invention provides a system of secured access to a computersystem that is highly resistant to fraudulent transaction authorizationattempts by unauthorized users.

Although the invention has been described with respect to a particulartokenless authorization system and method for its use, it will beappreciated that various modifications of the apparatus and method arepossible without departing from the invention, which is defined by theclaims set forth below.

What is claimed is:
 1. A method for tokenless authorization of anelectronic check between a payor and a payee using an electronicidenticator and at least one payor bid biometric sample, said methodcomprising the steps of: (a) a payor registration step, wherein thepayor registers with an electronic identicator at least one registrationbiometric sample, and at least one payor checking account data; (b) atransaction formation step, wherein an electronic financial transactionis formed between the payor and the payee, comprising at least one payorbid biometric sample, wherein the bid biometric sample is obtained fromthe payor's person; (c) at least one transmission step, wherein thepayor bid biometric sample is electronically forwarded to the electronicidenticator; (d) a payor identification step, wherein the electronicidenticator compares the payor bid biometric sample with at least oneregistered biometric sample for producing either a successful or failedidentification of the payor; (e) an account retrieval step, wherein thepayor's previously registered checking account data is retrieved;wherein upon successful identification of the payor, a biometric-basedauthorization of an electronic check is authorized using the payor'spreviously registered checking account data without the payor presentingany personalized man-made tokens including paper checks and magneticswipe cards to transfer funds from the payor's checking account to apayee financial account.
 2. The method of claim 1 further comprising theinclusion of a transaction amount in the transaction formation step. 3.The method of claim 1 further comprising a display step, in which thepayor's previously registered checking account data is electronicallydisplayed to the payor.
 4. The method of claim 1 further comprising aforwarding step, in which the payor's previously registered checkingaccount data is electronically forwarded to a financial transactionprocessor.
 5. The method of claim 1 wherein the electronic identicatoris operated by a third party.
 6. The method of claim 1 wherein the payorregistration step further comprises registering a payor personalidentification number with the electronic identicator.
 7. The method ofclaim 1 further comprising a payor resource determination step, whereinit is determined if the payor's checking account has sufficientresources to be debited for the transaction amount.
 8. The method ofclaim 1 further comprising a payor account selection step, wherein afterthe payor has been successfully identified in the payor identificationstep, the tokenless authorization system presents at least one checkingaccount which was registered by the payor with the tokenlessauthorization system for selection of one of the checking accounts bythe payor for debiting.
 9. The method of claim 1 further comprising atransaction payment step, wherein a transaction amount is debited from apayor's checking account.
 10. The method of claim 9, wherein thetransaction amount is credited to a payee's financial account.
 11. Themethod of claim 1 wherein the registration step further comprisesregistering a payor private code with the electronic third partyidenticator, which is distinct from a personal identification number andnot used in the payor identification step, wherein the private code isdisplayed to the payor to validate that the authentic electronic thirdparty identicator has processes the transaction.
 12. The method of claim7 wherein the payor resource determination step further comprises thetokenless authorization system communicating with at least one externalcomputer.
 13. The method of claim 9 wherein the transaction payment stepfurther comprises the tokenless authorization system communicating withat least one external computer.
 14. The method of claim 2 wherein thetransaction amount comprises price information, a list of goods andservices, a payee name, a date or time, a location, or an invoicenumber.
 15. The method of claim 1 further comprising a transactionacceptance step in which the payor approves the transaction.
 16. Themethod of claim 15 wherein the transaction acceptance step furthercomprises the payor entering a new transaction amount, which is the sumof a cash back amount and the transaction amount, for the financialtransaction.
 17. The method of claim 9 wherein the transaction paymentstep further comprises the payor designating a future date on which thetransaction amount is to be deducted from the payor's checking accountand credited to the payee's financial account.
 18. The method of claim 1further comprising a payor re-registration step, wherein the user'sregistration biometric samples are compared against previouslydesignated biometric samples wherein if a match occurs, the computersystem is alerted to the fact that the payor has re-registered with thetokenless authorization system.
 19. The method of claim 1 wherein thebiometric sample comprises of one of the following: a fingerprint, afacial scan, a retinal image, an iris scan, and a voice print.
 20. Themethod of claim 6 further comprising a biometric theft resolution step,wherein the payor's personal identification number is changed wheneverthe payor's biometric sample is determined to have been fraudulentlyduplicated.
 21. The method of claim 9 further comprising are-presentation step, wherein upon return of the electronic check, theelectronic check is automatically re-presented for debiting the checkingaccount of the payor.
 22. The method of claim 1 wherein during the payorregistration step, the payor registers at least one payor checkingaccount and assigns an account index code to each payor checkingaccount, and during an acceptance step the user adds the account indexcode to the financial transaction, wherein the account index codefurther comprises one or more alphanumeric characters.
 23. A tokenlesselectronic check authorization device for transferring funds from apayor checking account to a payee financial account, said devicecomprising: (a) a computer data processing center further comprisingdata bases wherein the payor registers a registration biometric sample;(b) a party identification apparatus having a biometric sensor for inputof a biometric sample; (c) communication lines for transmission of aregistration and bid biometric sample obtained by the partyidentification apparatus from the payor's person to the data processingcenter; (d) a comparator engine for comparing a bid biometric sample toat least one registration biometric sample; and (e) an execution modulefor authorizing transfer of a transaction amount from the payor checkingaccount to a payee financial account upon successful identification ofthe payor, wherein no man made memory devices such as a credit/debitcard, smartcard or a paper check is used by the payor to conduct thefinancial transaction.
 24. The authorization device of claim 23 whereinthe payor registration biometric sample is associated with a personalidentification number.
 25. The authorization device of claim 23 whereinthe execution module determines if the payor's checking account hassufficient resources to be debited for the transaction amount.
 26. Theauthorization device of claim 23 further comprising an account selectormodule, wherein after the payor has been successfully identified, theauthorization device presents at least one checking account which wasregistered by the payor with the authorization device for selection ofone of the checking accounts by the payor for debiting.
 27. Theauthorization device of claim 23 wherein the execution module debits thetransaction amount from a payor's checking account.
 28. Theauthorization device of claim 27, wherein the execution module creditsthe transaction amount to the payee's financial account.
 29. Theauthorization device of claim 23 further comprising an authorizationdevice identification means wherein the payor registers a private codewith the authorization device, which is distinct from a personalidentification number and not used to identify the payor, wherein theprivate code is displayed to the payor to validate that the authenticauthorization device has processed the financial transaction.
 30. Theauthorization device of claim 23 wherein a subset of the payorregistration biometric samples are stored in a payor re-registrationdatabase, which the comparator engine compares a payor's registrationbiometric samples to, wherein if a match occurs, the authorizationsystem is alerted to the fact that the payor has re-registered with thetokenless authorization system.
 31. The authorization device of claim 23further comprising a display means for displaying information to thepayor.
 32. The authorization device of claim 31 wherein the displaymeans is a point-of-sale terminal.
 33. The authorization device of claim31 wherein the display means is a party identification apparatus. 34.The authorization device of claim 23 wherein the execution module is notco-located with the electronic identicator.
 35. The authorization deviceof claim 23 wherein the execution module is operated by a third partyand communicates with the electronic identicator via communicationlines.
 36. The authorization device of claim 23 wherein the executionmodule consists of communicating with a financial transaction processor.37. The authorization device of claim 23 wherein the electronicidenticator is operated by a third party.